I’m not sure a human biased economy can actually function on a deflationary standard
There were long stretches of time during which the supply of gold and silver did not keep up with economic growth when gold and silver and currencies backed by gold and silver were the only currencies. Isn’t that proof that an economy can function using a deflationary currency?
It certainly proves something. However, one could argue that the economy didn’t function very well for much of that time. The industrial revolution happened not long after a whole load of new world gold entered Europe. That could just be because the technology and society forces that allowed the new world to be colonised where also prerequisite for industrialisation, but I think some people draw direct causality between the gold influx and industrialisation.
There were long stretches of time during which the supply of gold and silver did not keep up with economic growth when gold and silver and currencies backed by gold and silver were the only currencies. Isn’t that proof that an economy can function using a deflationary currency?
It certainly proves something. However, one could argue that the economy didn’t function very well for much of that time. The industrial revolution happened not long after a whole load of new world gold entered Europe. That could just be because the technology and society forces that allowed the new world to be colonised where also prerequisite for industrialisation, but I think some people draw direct causality between the gold influx and industrialisation.
This is a super interesting take. I’ll keep it in mind if I dig into the history of monetary systems again.